Cloud War Roils as Amazon Slashes S3 Prices

If there was any doubt of the all-out nature of the coming cloud wars ahead of Amazon’s first cloud conference, the company cleared that up with the announcement of dramatic reductions in the price for its S3 cloud-storage service on Wednesday at its first cloud conference in Las Vegas.

But Amazon’s reductions on S3 are like dropping the bomb to kick this battle off:

“We’re lowering prices for S3 by 24 percent to 27 percent in all regions,” said Andy Jassy, senior vice president of Amazon Web Services, a report at ZDNet notes. Amazon Web Services will cut S3 prices by roughly 24 percent to 27 percent across all regions in a move that illustrates the cloud provider’s ability to add economies of scale to its IT infrastructure, the report said.

ZDNet’s Larry Dignan sums up the AWS re:Invent conference’s aim:

In total, 6,000 people were attending re:Invent. Jassy noted that the conference wasn’t about marketing, but education and cloud knowledge. “We have a virtuous cycle the more customers we get,” said Jassy, referring to AWS ability to lower costs as it adds economies of scale and cuts prices. “We’re able to spin that flywheel faster,” he added. “We’ve lowered prices 23 times since 2006.”

However, it’s was hard to overlook the key message with AWS. AWS has a head start on rivals ranging from HP to Oracle to Google. Every cloud player is coming after AWS. The challenge for Amazon’s rivals is that AWS is more mature and serves as the basis of multiple enterprises IT infrastructure.

But Jassy had the choicest digs at the old-school tech giants turned cloud players, the report said:

The old guard technology companies are taking their products and affixing the word cloud to them. You have to be careful of who is telling you what. They are cloud washers. The economics of what we are doing are disruptive to the old guard technology companies.

Dignan writes, “The cloud battle will be interesting. AWS seemed to be much more comfortable with taking on the likes of Oracle, IBM and HP and their cloud efforts.”

Have your say: No digs at Google…. What do you read into that? Not so sure about that advantage? And where is this all headed? With price cuts the strategy, will we be asking “Where’s the beef?” with the cloud’s own burger wars?